Michigan Court of Appeals; Docket # 343263; Unpublished
Judges Redford, Markey, and Kelly; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Assignments of Benefits—Validity and Enforceability
SUMMARY:
In this unanimous unpublished per curiam decision regarding assignments of rights to no-fault PIP benefits, the Court of Appeals reversed the trial court’s summary disposition order dismissing the plaintiff’s action and remanded for further proceedings. The Court of Appeals held that the anti-assignment clause in the automobile insurance policy at issue was unenforceable pursuant to the Court’s decision in Shah and that partial assignments of benefits are valid. The Court also determined that the trial court should have allowed the plaintiff to amend its complaint after accidentally forgetting to attach the executed assignment to its original complaint.
The plaintiff, in this case, Michigan Institute of Pain and Headache, P.C., treated an injured father and daughter after a motor vehicle accident and obtained assignments from both for their rights to no-fault PIP benefits. The plaintiff brought suit against its patients’ automobile insurance company, Allstate Insurance Company, but “apparently neglected to attach any assignments to its complaint.” Allstate moved for summary disposition, arguing that the plaintiff’s lawsuit was barred by Covenant and that no actual assignments were attached to the plaintiff’s complaint. The plaintiff requested an opportunity to amend its complaint, but the trial court denied its motion solely “on the strength of Covenant.”
The Court of Appeals reversed the trial court’s ruling, finding firstly that there was “no reason not to grant plaintiff’s request to amend its complaint to add the assignments as attachments to the complaint.” More importantly, however, the Court rejected Allstate’s two arguments on appeal: (1) that the anti-assignment clause in the insurance policy at issue barred the plaintiff’s patients from assigning their rights without Allstate’s approval, and (2) that the assignments were invalid as merely partial assignments.
As to the first argument, the Court of Appeals cited its decision in Shah, in which it determined that such anti-assignment clauses are a violation of public policy, and therefore unenforceable. As to the second argument, the Court cited its decision in Henry Ford, which held that partial assignments were, in fact, enforceable.
Defendant, however, maintains that any amendment would be futile because the assignments were only partial assignments and because the insurance policy at issue prohibited the insureds from transferring the policy to anyone without defendant’s consent, which was never given. In Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182, 200; 920 NW2d 148 (2018), this Court held that an anti-assignment clause was “unenforceable to prohibit the assignment that occurred [in the case]—an assignment after the loss occurred of an accrued claim to payment—because such a prohibition of assignment violates Michigan public policy . . . .” This Court subsequently reaffirmed the holding in Shah. Henry Ford Health Sys v Everest Nat’l Ins Co, __ Mich App __, __; __ NW2d __ (2018); slip op at 4 (“Accordingly, we must conclude that the anti-assignment clause in defendant’s policy is unenforceable because it is contrary to public policy.”). Furthermore, the Henry Ford panel rejected the partial assignment argument defendant proffers us here, concluding that if it “were to hold that the assignment . . . was an unenforceable partial assignment, it would effectively render the insured’s right to assign a claim for past or presently due benefits meaningless.” Id. at __; slip op at 6.5 Shah and Henry Ford constitute binding case law. MCR 7.215(J)(1).6
